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Right I guess the point I'm making is that once Amazon is forced to raise margins, will they still be Amazon? If Amazon never raises margins, what's the investm
by gfodor 14y ago
Right I guess the point I'm making is that once Amazon is forced to raise margins, will they still be Amazon? If Amazon never raises margins, what's the investment thesis? Something has to give.
The main theory is that Amazon is building up such a wide economic moat that consumers are going to be willing to put up with higher prices or competitors will still never be able to beat them on margins even when they start to take profits. This is a pretty huge bet.
- Retric 14y agoI think AWS is a classic case of economies of scale enabling profitability outside the reach of smaller companies. The AWS R&D get's reused for there internal systems driving down the costs of running there internal systems. So even if AWS only breaks even it's still a net win for the company.